ODI Write up Essay

Submitted By happygolucky12345
Words: 1807
Pages: 8

The total savings we found for a farmer will be $0.18 per bird annually (Exh-1). For a farmer with 1,000,000 chickens, this increase in profit per bird means a huge increase in overall profit by $255,000 per year. Besides, since the cost of lens insertion process almost equals to debeaking process, it is not necessary to hire new labor force. Training the existing crew, which probably will be supplied by the sales representatives of the ODI lens, is enough to be capable of lens insertion.

From the perspective of economy, assuming that this simple cost analysis is enough to convince farmers to switch to lens system and also assuming that there will be no other competitors in the market for at least the first 3 years with existing patent protection, everything seems easy and doable.
However, company must be quick to collect cash because they have neither enough money nor an investor support. So they need to develop the market as fast as they can and they must have an aggressive marketing plan to do this. California has the largest share in chicken farms in Pacific region. In 1969, the total number of chickens in California was about 46M with a 12% overall share. It is estimated that while the growth rate of total chicken number in U.S shows a declining pattern between 1969 - 1974 and slightly changes between
1974-1979, the number of chickens in California have an inclining trend during the same periods (Exh-
2a/2b). Based on these calculations, it is appropriate to say that California is a good market as an initial distribution point. Two counties in southern California have 21M of 55M chickens in all California, by making a 38% regional share. This means that the first focus in the region must be southern California.
Except California, there is no major state with a significant number of chickens in pacific region. However,
South Atlantic, having the largest number of chickens in entire U.S, seems to be the next possible market on the way of national distribution after the regional success is guaranteed (Exh-3). Poultry industry has been evolved through success examples. If there is one well-known farmer doing something new and saving money with that, it is very likely for others to do the same thing.

Start here!!!!!!
ODI lens is an innovation and with being an ‘innovation’, it is also uncommon for a typical, family operated, small farm. These farms usually operate at either break even or at a small profit. Farmers, who have a small scale egg production, do not intend to pay for an extra cost unless they are willing to contract their production to a larger producer. As discussed before, small farms are definitely out of target segment for ODI lenses. A medium farm, which is operated more professionally compared to a small farm, has more potential to consider cost cutting innovations. The owner of a medium farm has both business and agricultural skills, which -in fact-is better to understand the ODI lens advantages in both perspectives. Since the farmer is also the owner of the company, he has the managerial power to deal with large corporate suppliers. And this makes it easy for ODI lens sales representatives to contact directly to the owner of a medium farm. Furthermore, the cost saving -and consequently the profit increasing- advantage of ODI lens will be more obvious in a medium farm when compared to its overall cash flow. A total of 381 medium farms with 11M total chicken capacity is estimated for year 1974 by using growth rate analogy. There is only slightly change in number of medium farms until 1979 (Exh-4). Therefore, large farms have the potential to be the first target segment for ODI lenses in the short run. On the other hand, a large farm with a minimum 50,000 birds flock size capacity may be considered as a small manufacturing firm. The administration of such farm is complex and layered. However, the farm is likely to have a declining average production cost…